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LEASE AGREEMENT BETWEEN WHMNY REAL ESTATE LIMITED PARTNERSHIP, AS LANDLORD, AND EARTHLINK, INC., AS TENANT DATED SEPTEMBER 19, 2005 PASADENA, CALIFORNIA TABLE OF CONTENTS

Limited Partnership Agreement

LEASE AGREEMENT BETWEEN   WHMNY REAL ESTATE LIMITED PARTNERSHIP,   AS LANDLORD, AND   EARTHLINK, INC.,   AS TENANT   DATED SEPTEMBER 19, 2005   PASADENA, CALIFORNIA     TABLE OF CONTENTS | Document Parties: EARTHLINK INC | WHMNY REAL ESTATE LIMITED PARTNERSHIP You are currently viewing:
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EARTHLINK INC | WHMNY REAL ESTATE LIMITED PARTNERSHIP

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Title: LEASE AGREEMENT BETWEEN WHMNY REAL ESTATE LIMITED PARTNERSHIP, AS LANDLORD, AND EARTHLINK, INC., AS TENANT DATED SEPTEMBER 19, 2005 PASADENA, CALIFORNIA TABLE OF CONTENTS
Date: 10/20/2005
Industry: Computer Services     Sector: Technology

LEASE AGREEMENT BETWEEN   WHMNY REAL ESTATE LIMITED PARTNERSHIP,   AS LANDLORD, AND   EARTHLINK, INC.,   AS TENANT   DATED SEPTEMBER 19, 2005   PASADENA, CALIFORNIA     TABLE OF CONTENTS, Parties: earthlink inc , whmny real estate limited partnership
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Exhibit 10.1

 

LEASE AGREEMENT BETWEEN

 

WHMNY REAL ESTATE LIMITED PARTNERSHIP,

 

AS LANDLORD, AND

 

EARTHLINK, INC.,

 

AS TENANT

 

DATED SEPTEMBER 19, 2005

 

PASADENA, CALIFORNIA

 



 

TABLE OF CONTENTS

 

1.

Definitions and Basic Provisions

 

 

 

 

 

2.

Lease Grant

 

 

 

 

 

3.

Tender of Possession

 

 

 

 

 

4.

Rent

 

 

(a)

Payment

 

 

(b)

Operating Costs; Taxes

 

 

 

 

5.

Delinquent Payment; Handling Charges

 

 

 

 

 

6.

Intentionally Omitted

 

 

 

 

 

7.

Landlord’s Obligations

 

 

(a)

Landlord’s Maintenance Obligations

 

 

(b)

Landlord’s Right to Perform Tenant’s Obligations

 

 

(c)

Tenant’s Right to Perform Landlord’s Obligations

 

 

 

 

 

8.

Improvements; Alterations; Repairs; Maintenance

 

 

(a)

Improvements; Alterations

 

 

(b)

Repairs; Maintenance

 

 

(c)

Performance of Work

 

 

(d)

Mechanic’s Liens

 

 

(e)

Janitorial Services

 

 

(f)

Utilities

 

 

(g)

Security Services

 

 

 

 

 

9.

Use

 

 

 

 

 

 

10.

Assignment and Subletting

 

 

(a)

Transfers

 

 

(b)

Consent Standards

 

 

(c)

Request for Consent

 

 

(d)

Conditions to Consent

 

 

(e)

Attornment by Subtenants

 

 

(f)

Cancellation

 

 

(g)

Additional Compensation

 

 

(h)

Permitted Transfers

 

 

 

 

 

11.

Insurance; Waivers; Subrogation; Indemnity

 

 

(a)

Tenant’s Insurance

 

 

(b)

Landlord’s Insurance

 

 

(c)

No Subrogation; Waiver of Property Claims

 

 

(d)

Indemnity

 

 

 

 

 

12.

Subordination; Attornment; Notice to Landlord’s Mortgagee

 

 

(a)

Subordination

 

 

(b)

Attornment

 

 

(c)

Notice to Landlord’s Mortgagee

 

 

(d)

Landlord’s Mortgagee’s Protection Provisions

 

 

 

 

 

13.

Rules and Regulations

 

 

 

 

 

14.

Condemnation

 

 

(a)

Total Taking

 

 

(b)

Partial Taking - Tenant’s Rights

 

 

(c)

Partial Taking - Landlord’s Rights

 

 



 

 

(d)

Temporary Taking

 

 

(e)

Award

 

 

 

 

 

15.

Fire or Other Casualty

 

 

(a)

Repair Estimate

 

 

(b)

Tenant’s Rights

 

 

(c)

Landlord’s Rights

 

 

(d)

Repair Obligation

 

 

(e)

Waiver of Statutory Provisions

 

 

(f)

Abatement of Rent

 

 

 

 

 

16.

Personal Property Taxes

 

 

 

 

 

17.

Events of Default

 

 

(a)

Payment Default

 

 

(b)

Estoppel

 

 

(c)

Insurance

 

 

(d)

Mechanic’s Liens

 

 

(e)

Other Defaults

 

 

(f)

Insolvency

 

 

 

 

 

18.

Remedies

 

 

(a)

Termination of Lease

 

 

(b)

Enforcement of Lease

 

 

(c)

Sublessees of Tenant

 

 

(d)

Efforts to Relet

 

 

(e)

Suspension of Services

 

 

 

 

 

19.

Payment by Tenant; Non-Waiver; Cumulative Remedies

 

 

(a)

Payment by Tenant

 

 

(b)

No Waiver

 

 

(c)

Cumulative Remedies

 

 

 

 

 

20.

Tenant Acknowledgements

 

 

 

 

 

21.

Surrender of Premises

 

 

 

 

 

22.

Holding Over

 

 

 

 

 

23.

Certain Rights Reserved by Landlord

 

 

(a)

Building Operations

 

 

(b)

Prospective Purchasers and Lenders

 

 

(c)

Prospective Tenants

 

 

 

 

 

24.

Landlord Default

 

 

 

 

 

25.

Miscellaneous

 

 

(a)

Landlord Transfer

 

 

(b)

Landlord’s Liability

 

 

(c)

Force Majeure

 

 

(d)

Brokerage

 

 

(e)

Estoppel Certificates

 

 

(f)

Notices

 

 

(g)

Separability

 

 

(h)

Amendments; Binding Effect; No Electronic Records

 

 

(i)

Quiet Enjoyment

 

 

(j)

No Merger

 

 

(k)

No Offer

 

 

(1)

Entire Agreement

 

 

(m)

Waiver of Jury Trial

 

 

(n)

Governing Law

 

 



 

 

(o)

Recording

 

 

(p)

Water or Mold Notification

 

 

(q)

Joint and Several Liability

 

 

(r)

Financial Reports

 

 

(s)

Landlord’s Fees

 

 

(t)

Attorneys’ Fees

 

 

(u)

Telecommunications

 

 

(v)

Confidentiality

 

 

(w)

Authority

 

 

(x)

Hazardous Materials

 

 

(y)

Parking

 

 

(z)

List of Exhibits

 

 

(aa)

Consent and Approval Standards

 

 

(bb)

Damages

 

 

(cc)

Compliance With Laws

 

 

 

 

 

26.

Renewal Option

 

 

 

 

 

27.

Right to Terminate

 

 



 

LIST OF DEFINED TERMS

 

Additional Rent

 

Affiliate

 

Base Tax Year

 

Basic Lease Information

 

Basic Rent

 

Building

 

Building’s Structure

 

Building’s Systems

 

Casualty

 

Commencement Date

 

Complex

 

Damage Notice

 

Default Rate

 

Event of Default

 

Expense Stop

 

GAAP

 

Generator Space

 

Hazardous Materials

 

including

 

Initial Liability Insurance Amount

 

Land

 

Landlord

 

Landlord’s Mortgagee

 

Law

 

Laws

 

Lease

 

Letter of Credit

 

Loss

 

Mortgage

 

Operating Costs

 

Operating Costs and Tax Statement

 

Parking Area

 

Permitted Transfer

 

Permitted Transferee

 

Permitted Use

 

Premises

 

Prevailing Rental Rate

 

Primary Lease

 

Prior Lease

 

Project

 

Rent

 

Repair Period

 

Taking

 

Tangible Net Worth

 

Taxes

 

Telecommunications Services

 

Tenant

 

Tenant Party

 

Tenant’s Off-Premises Equipment

 

Tenant’s Proportionate Share

 

Term

 

Transfer

 

 



 

LEASE

 

This Lease Agreement (this “ Lease ”) is entered into as of September 19, 2005, between WHMNY REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership ( Landlord ), and EARTHLINK, INC., a Delaware corporation ( Tenant ).

 

1.              Definitions and Basic Provisions .   The definitions and basic provisions set forth in the Basic Lease Information (the Basic Lease Information ) executed by Landlord and Tenant contemporaneously herewith are incorporated herein by reference for all purposes.  Additionally, the following terms shall have the following meanings when used in this Lease: Affiliate means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question; Building’s Structure means the Building’s exterior walls, roof, elevator shafts, footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, and structural columns and beams; Building’s Systems means the Building’s base building HVAC, life-safety, plumbing, electrical, elevator and mechanical systems, but excludes those portions of such systems which were installed by Tenant or specifically for Tenant; including means including, without limitation; Laws means all federal, state, and local laws, ordinances, rules and regulations, all court orders, governmental directives, and governmental orders and all interpretations of the foregoing, and all restrictive covenants affecting the Project, and “ Law ” means any of the foregoing; Generator Space means the separate structure housing the electrical generators for the Building, it being acknowledged that all of the provisions of this Lease applicable to the Premises shall be applicable to the Generator Space except as otherwise provided herein; Tenant’s Off-Premises Equipment means any of Tenant’s equipment or other property that may be located on or about the Project (other than inside the Premises) including the generators, chiller, UPS system, electrical switch, batteries and control systems located in the Generator Space, and all related improvements connecting said equipment to the Building; and Tenant Party means any of the following persons: Tenant; any assignees claiming by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, licensees, guests and invitees.

 

2.              Lease Grant .   Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises.

 

3.              Tender of Possession Tenant is currently in possession of the Premises pursuant to that certain lease dated September 26, 1996, between Landlord’s predecessor in interest and Tenant, as amended (the Prior Lease ).  As the existing tenant of the Premises, Tenant shall be deemed to have accepted the Premises in their existing “AS-IS” condition as of the Commencement Date except as otherwise provided in Exhibit D attached hereto and Tenant acknowledges that the Premises are suitable for the Permitted Use.  From and after the Commencement Date, Tenant’s continued occupancy of the Premises shall be governed by the terms of this Lease.  As of the date hereof, neither Landlord nor Tenant has, to its knowledge, any claims, counterclaims, set-offs or defenses against the other arising out of the Prior Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.  Landlord and Tenant further agree that effective as of the Commencement Date, the Prior Lease shall be deemed terminated and neither Landlord nor Tenant shall have any further rights or obligations to the other accruing under the Prior Lease after the Commencement Date, but all obligations under the Prior Lease accruing prior to the Commencement Date shall survive the termination of the Prior Lease, including reconciliation of Operating Costs and Taxes for the period January 1, 2005 through June 30, 2005, which reconciliation shall be performed in accordance with the terms of the Prior Lease.

 

4.              Rent .

 

(a)            Payment .   Tenant shall timely pay to Landlord Rent, without notice, demand, deduction or set off (except as otherwise expressly provided herein), by good and sufficient check drawn on a national banking association at Landlord’s address provided for in this Lease or as otherwise specified by Landlord and shall be accompanied by all applicable state and local sales or use taxes.  Basic Rent, adjusted as herein provided, shall be payable monthly in advance.  Basic Rent shall be payable on the first day of each month in accordance with the Basic Rent schedule set forth in the Basic Lease Information.  Payments of Basic Rent for any fractional calendar month at the end of the Term shall equal the product of 1/365 of the annual Basic Rent in effect during the partial

 

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month and the number of days in the partial month and shall be due on the first day of such month.  Tenant shall pay Additional Rent at the same time and in the same manner as Basic Rent.

 

(b)           Operating Costs; Taxes .  Commencing January 1, 2007, Tenant shall pay to Landlord the amount (per each rentable square foot in the Premises) ( Additional Rent ) by which the annual Operating Costs (defined below) per rentable square foot in the Building exceed the Expense Stop (per rentable square foot in the Building).  Landlord may make a good faith estimate of the Additional Rent to be due by Tenant for any calendar year or part thereof during the Term.  During each calendar year or partial calendar year of the Term (after the base year, if the Expense Stop is calculated on a base year basis), Tenant shall pay to Landlord, in advance concurrently with each monthly installment of Basic Rent, an amount equal to the estimated Additional Rent for such calendar year or part thereof divided by the number of months therein.  From time to time, Landlord may estimate and re-estimate the Additional Rent to be due by Tenant and deliver a copy of the estimate or re-estimate to Tenant, but Landlord may re-estimate Additional Rent no more than once in any calendar year.  Thereafter, the monthly installments of Additional Rent payable by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the end of the calendar year in question, Tenant shall have paid all of the Additional Rent as estimated by Landlord.  Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each calendar year.

 

(1)           The term Operating Costs means all expenses and disbursements (subject to the limitations set forth below) that Landlord incurs in connection with the ownership, operation, and maintenance of the Project, determined in accordance with customary real estate industry accounting practices consistently applied, including the following costs: (A) wages and salaries of all on-site employees at or below the grade of building manager or its equivalent engaged in the operation or maintenance of the Project (together with Landlord’s reasonable allocation of expenses of off-site employees at or below the grade of building manager or its equivalent to the extent such off-site employees perform services in connection with the operation or maintenance of the Project), including taxes, insurance and benefits relating thereto; (B) all supplies and materials used in the operation, maintenance, repair, and replacement of the Project; (C) costs for improvements made to the Project which, although capital in nature, are expected to reduce the normal operating costs (including all utility costs) of the Project, as amortized using the interest rate then announced by Bank of America or, if Bank of America ceases to exist or ceases to publish such rate, the rate then announced by the largest (as measured by deposits) chartered bank operating in California, as its “prime rate” or “reference rate” over the time period reasonably estimated by Landlord to recover the costs thereof and limited to the estimated savings in Operating Costs, as well as capital improvements made in order to comply with any Law hereafter promulgated by any governmental authority or any interpretation hereafter rendered with respect to any existing Law, as amortized using the interest rate then announced by Bank of America or, if Bank of America ceases to exist or ceases to publish such rate, the rate then announced by the largest (as measured by deposits) chartered bank operating in California, as its “prime rate” or “reference rate” over the useful economic life of such improvements as determined in accordance with customary real estate industry accounting practices consistently applied; (D) insurance expenses; (E) repairs, replacements, and general maintenance of the Project; and (F) service, maintenance and management contracts with independent contractors for the operation, maintenance, management, repair or replacement of the Project.  If the Building is part of a multi-building office complex (the Complex ).   Operating Costs and Taxes for the Complex may be equitably prorated among the Project and the other buildings of the Complex, as reasonably determined by Landlord.

 

For purposes of this Lease, Operating Costs shall not include the following:

 

a.              Costs of repair or replacement, in excess of commercially reasonable deductibles, incurred by reason of fire or other casualty that are covered or should have been covered by insurance had Landlord complied with the insurance requirements imposed upon Landlord under the terms of this Lease, or exercise of the right of eminent domain.

 

b.              Leasing commissions, advertising and other promotional costs and expenses, attorneys’ fees, costs and disbursements and other expenses incurred in negotiating or executing leases or in resolving disputes with other tenants, other occupants, or other prospective tenants or occupants of the Building or any portion

 

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thereof, collecting rents or otherwise enforcing leases of other tenants of the Building or any portion thereof.

 

c.              Any capital improvement items except as set forth in Section 4(b)(l)(C) above.

 

d.              Depreciation and amortization of loans.

 

e.              Costs and expenses incurred by Landlord for which Landlord is actually reimbursed by parties other than tenants of the Building, including, without limitation, insurance proceeds.

 

f.               Costs and expenses attributable to the correction of any construction defects in the initial construction of the Building.

 

g.              Finance and debt service costs for the Building or any portion thereof and rental under any ground lease or leases for the Building or any portion thereof.

 

h.              Landlord’s general overhead except as it relates to the operation, management, maintenance and repair of the Building.

 

i.               Costs and expenses for items and services for which Tenant reimburses Landlord or pays third persons, to the extent of such reimbursement or payment.

 

j.               Costs, fines or penalties incurred due to violations by Landlord of any governmental rule or authority, other than any such cost, fine or penalty (not otherwise paid by Tenant) incurred due to any violation caused by any act or omission of Tenant, its employees or agents.

 

k.              Costs of management fees (including reimbursables and other related costs) to the extent they exceed comparable fees incurred in comparable office buildings in the area.

 

1.              Costs of wages, salaries, or other compensation paid to any executive employees of Landlord above the grade of “Project Manager” or paid to employees of Landlord who are not employed full time, on site at the Building; provided, however, if an employee of Landlord works on several buildings, including the Building, the costs and expenses incurred in connection with such employee shall be equitably allocated among such buildings by Landlord in accordance with reasonable and consistent criteria.

 

m.             Costs and expenses incurred in leasing air conditioning systems, elevators or other equipment ordinarily considered to be of a capital nature.

 

n.              Costs and expenses for the removal or encapsulation of asbestos or other hazardous or toxic substances brought into the Building by Landlord in violation of Laws.

 

o.              Any expenses for repairs or maintenance which are covered by warranties and service contracts, to the extent such maintenance and repairs are made at no cost to Landlord.

 

p.              Any costs representing any amount paid for services and materials (including overhead and profit increments) to a related person, firm, or entity to the extent such amount exceeds the amount that would be paid for such services or materials at the then existing market rates to an unrelated person, firm or entity.

 

q.              If any taxes paid by Landlord and previously included in Operating Costs are refunded, Landlord shall promptly pay Tenant an amount equal to the amount of such refund (less the reasonable expenses incurred by Landlord in obtaining such refund) multiplied by Tenant’s share in effect for the period to which such refund relates.

 

r.               The cost of overtime or other expenses incurred by Landlord in curing its defaults.

 

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s.              Any amounts payable by Landlord which constitutes a fine or penalty, including interest or penalties for any late payment.

 

t.               Repairs,  alterations, and general maintenance paid by proceeds of insurance and repairs necessitated by Landlord’s violations of law in effect as of the date of this Lease.

 

u.              Repairs, alterations, and general maintenance necessitated by the gross negligence or willful misconduct of Landlord or its agents, employees, or contractors.

 

v.              Taxes which are not properly allocable to the site on which the Building is located.

 

w.             Any expenses, costs or accruals related to portions of the Complex other than the Building, except to the extent such expenses costs or accruals are properly allocated to the Building.

 

x.              Charitable contributions of Landlord.

 

y.              Any other expense which under customary real estate industry accounting practices consistently applied would not be considered to be a normal Operating Cost.

 

z.              If the Expense Stop is calculated on a base year basis, Operating Costs for the base year only shall not include market-wide labor-rate increases due to extraordinary circumstances, including boycotts and strikes; utility rate increases due to extraordinary circumstances, including conservation surcharges, boycotts, embargos or other shortages; or amortized costs relating to capital improvements.

 

(2)            Commencing January 1, 2007, Tenant shall also pay Tenant’s Proportionate Share of any increase in Taxes for each year and partial year falling within the Term over the Taxes for the Base Tax Year.  Tenant shall pay Tenant’s Proportionate Share of Taxes in the same manner as provided above for Tenant’s Proportionate Share of Operating Costs. Taxes means taxes, assessments, and governmental charges or fees whether federal, state, county or municipal, and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments (including non-governmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Costs) now or hereafter attributable to the Project (or its operation), excluding, however, penalties and interest thereon and federal and state taxes on income (if the present method of taxation changes so that in lieu of or in addition to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Project, then all such taxes, assessments, or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for purposes hereof).  Taxes shall include the reasonable actual costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Project.  For property tax purposes, Tenant waives all rights to protest or appeal the appraised value of the Premises, as well as the Project, and all rights to receive notices of reappraisement.

 

(3)            By April 1 of each calendar year, or as soon thereafter as practicable, Landlord shall furnish to Tenant a statement of Operating Costs for the previous year, in each case adjusted as provided in Section 4(b)(4), and of the Taxes for the previous year (the Operating Costs and Tax Statement ).  If Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for the year covered by the Operating Costs and Tax Statement exceed Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Landlord shall promptly credit or reimburse Tenant for such excess; likewise, if Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for such year are less than Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Tenant shall promptly pay Landlord such deficiency.  Notwithstanding the foregoing, in the event that Landlord fails to deliver to Tenant such Operating Costs and Tax Statement on or before December 31 of the following year with respect to Operating Costs and

 

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Taxes actually billed to Landlord during the previous year, Landlord shall waive its right to collect any such deficiency in the payment of such Operating Costs and Taxes.

 

(4)            With respect to any calendar year or partial calendar year in which the Building is not occupied to the extent of 100% of the rentable area thereof, the Operating Costs for such period which vary with the occupancy of the Building shall, for the purposes hereof, be increased to the amount which would have been incurred had the Building been occupied to the extent of 100% of the rentable area thereof.

 

(5)            Provided no Event of Default then exists, after receiving an annual Operating Costs and Tax Statement and giving Landlord 30 days’ prior written notice thereof, Tenant may inspect Landlord’s records relating to Operating Costs and Taxes for the period of time covered by such Operating Costs and Tax Statement in accordance with the following provisions.  If Tenant fails to object to the calculation of Operating Costs and Taxes on an annual Operating Costs and Tax Statement within 90 days after the statement has been delivered to Tenant, or if Tenant fails to conclude its inspection within 180 days after the statement has been delivered to Tenant, then Tenant shall have waived its right to object to the calculation of Operating Costs and Taxes for the year in question and the calculation of Operating Costs and Taxes set forth on such statement shall be final.  Tenant’s inspection shall be conducted where Landlord maintains its books and records (which shall be in Southern California), shall not unreasonably interfere with the conduct of Landlord’s business, and shall be conducted only during business hours reasonably designated by Landlord.  Landlord will reasonably cooperate, consistent with customary real estate industry practices for institutional landlords, with Tenant’s conduct of such audit.  Tenant shall pay the cost of such inspection, unless the total Operating Costs and Taxes for the period in question is determined to be overstated by more than 4% in the aggregate, in which case Landlord shall pay the inspection cost (not to exceed the amount Tenant was overcharged for the period in question).  Tenant may not conduct an inspection more than once during any calendar year.  Unless Landlord disputes the results of such inspection, if such inspection reveals that an error was made in the Operating Costs or Taxes previously charged to Tenant, then Landlord shall refund to Tenant any overpayment of any such costs, or Tenant shall pay to Landlord any underpayment of any such costs, as the case may be, within 30 days after notification thereof.  If Landlord disputes the results of such inspection, such dispute shall be submitted to expedited, binding arbitration in accordance with the rules of the American Arbitration Association.  Tenant shall maintain the results of each such inspection confidential and shall not be permitted to use any third party to perform such inspections, other than an independent firm of certified public accountants (1) reasonably acceptable to Landlord, (2) which is not compensated on a contingency fee basis or in any other manner which is dependent upon the results of such inspection (and Tenant shall deliver the fee agreement or other similar evidence of such fee arrangement to Landlord upon request), and (3) which agrees with Landlord in writing to maintain the results of such inspection confidential.  Nothing in this Section 4(b)(5) shall be construed to limit, suspend or abate Tenant’s obligation to pay Rent when due, including Additional Rent.

 

5.              Delinquent Payment; Handling Charges .   All past due payments required of Landlord or Tenant hereunder shall bear interest from the date due until paid at the lesser of ten percent per annum or the maximum lawful rate of interest (such lesser amount is referred to herein as the Default Rate ); additionally, Landlord, in addition to all other rights and remedies available to it, may charge Tenant a fee equal to five percent of the delinquent payment to reimburse Landlord for its cost and inconvenience incurred as a consequence of Tenant’s delinquency.  In no event, however, shall the charges permitted under this Section 5 or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest.  Notwithstanding the foregoing, the late fee referenced above shall not be charged with respect to the first two occurrences (but not any subsequent occurrence) during any 12-month period that Tenant fails to make payment when due, until five days after Landlord delivers written notice of such delinquency to Tenant.

 

6.              Intentionally Omitted .

 

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7.              Landlord’s Obligations .

 

(a)            Landlord’s Maintenance Obligations .   Subject to the provisions of Section 4(b), Landlord’s maintenance obligations are limited to the repair and replacement of the Building’s Structure, the Building’s Systems, including the three (3) one hundred twenty ton HVAC units on the roof of the Building, and maintenance and repair of the common areas of the Project (including parking areas and landscaping) and Landlord shall keep the Building’s Structure and common areas of the Project in good order and repair.  Landlord shall not be responsible for (1) any such work until Tenant notifies Landlord of the need therefor in writing or (2) alterations to the Building’s Structure required by applicable law as a result of the nature of Tenant’s use of the Premises (which alterations shall be Tenant’s responsibility).  Further, at such time as Landlord determines that replacement of the Building roof is required, Landlord shall replace the roof at Landlord’s sole cost.  Such roof replacement shall be coordinated with Tenant so as to minimize any disturbance of Tenant’s operations in the Building.  The Building’s Structure does not include skylights, windows, glass or plate glass, doors, special fronts, or office entries, all of which shall be maintained by Tenant.  Subject to the provisions of Section 4(b), Landlord’s liability for any defects, repairs, replacement or maintenance for which Landlord is specifically responsible for under this Lease shall be limited to the cost of performing the work.  Further, within twelve (12) months following the Commencement Date, Landlord shall, at its sole cost, slurry seal and restripe the parking area of the Project and install a handrail along the exterior ramp at the west side of the Building.  Additionally, Landlord shall repair the defective leveling material on the second floor of the Premises in accordance with Section 12 of Exhibit D attached hereto.  Notwithstanding anything to the contrary contained in this Lease, Landlord shall have no obligations with respect to the maintenance, repair or replacement of Tenant’s Off-Premises Equipment, the Generator Space or the six (6) twenty ton HVAC units on the roof of the Building, which shall be the sole responsibility of Tenant.

 

(b)            Landlord’s Right to Perform Tenant’s Obligations .   Landlord may perform Tenant’s maintenance, repair, and replacement obligations and any other items that are Tenant’s obligation pursuant to Section 8 if Tenant fails to do so after 30 days’ written notice to Tenant.  Tenant shall reimburse Landlord for the cost incurred in so doing within 30 days after being invoiced therefor.

 

(c)            Tenant’s Right to Perform Landlord’s Obligations Tenant may perform Landlord’s maintenance, repair, and replacement obligations and any other items that are Landlord’s obligation pursuant to this Section 7 if (1) Landlord fails to commence the performance of such obligations within thirty (30) days’ following written notice from Tenant to Landlord, which notice shall set forth in reasonable detail the obligations which Landlord has failed to perform, and (2) Tenant thereafter again notifies Landlord of Landlord’s failure to perform, which notice shall indicate that Tenant shall perform such obligations if Landlord fails to commence the performance of such obligations within 5 business days following Tenant’s second notice.  Any such work by Tenant shall be performed in accordance with the requirements of Section 8(c) of this Lease.  Landlord shall reimburse Tenant for the reasonable costs incurred in performing such work within thirty (30) days after receipt of a payment demand from Tenant, which demand shall include reasonably detailed documentation of such costs.  If Landlord does not pay such amount within thirty (30) days after such payment demand, the amount owed shall bear interest at the Default Rate and, alternatively, Tenant may deduct such amounts owed from the Basic Rent next due under this Lease until such amounts owed are paid in full; provided, however, that such deductions shall not at any time be more than twenty percent (20%) of the total monthly Basic Rent then due hereunder during any month; provided, further, that such offset right shall not be applicable and Tenant shall have no right to deduct any amount from Basic Rent unless the amount owed by Landlord to Tenant for any individual obligation of Landlord so performed by Tenant exceeds Fifty Thousand Dollars ($50,000.00).  Notwithstanding the foregoing, if Landlord disputes the amounts claimed due by Tenant, such dispute shall be submitted to expedited, binding arbitration in accordance with the rules of the American Arbitration Association, and the prevailing party shall be entitled to the benefit of Section 25(t) of this Lease.

 

8.              Improvements; Alterations; Repairs; Maintenance .

 

(a)           Improvements; Alterations .   Improvements to the Premises shall be installed at Tenant’s expense only in accordance with plans and specifications which have been previously submitted to and approved in writing by Landlord, which approval shall be governed by the provisions set forth in this Section 8(a).  No alterations or physical additions in or to the Premises may be made without Landlord’s prior written consent, which shall not be unreasonably withheld or delayed; however, Landlord may withhold its consent to any alteration

 

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or addition that would adversely affect (in the reasonable discretion of Landlord) the (1) Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), or (2) exterior appearance of the Building.  Tenant shall not paint or install lighting or decorations, signs, window or door lettering, or advertising media of any type visible from the exterior of the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld and which installation shall be subject to Tenant obtaining approval of all applicable governmental authorities and compliance with any covenants, conditions and restrictions affecting the Project.  All alterations, additions, and improvements shall be constructed, maintained, and used by Tenant, at its risk and expense, in accordance with all Laws; Landlord’s consent to or approval of any alterations, additions or improvements (or the plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord’s acceptance, that the same comply with sound architectural and/or engineering practices or with all applicable Laws, and Tenant shall be solely responsible for ensuring all such compliance.  Notwithstanding the foregoing, Landlord’s consent shall not be required for improvements if (i) such improvements do not adversely affect the Building’s Structure or the Building’s Systems, (ii) are not visible from the exterior of the Premises, (iii) the cost of such improvements does not exceed $50,000.00 in the aggregate; and (iv) Tenant provides Landlord at least 10 days’ prior written notice of its intent to make such improvements together with plans and specifications for the same.  All improvements shall comply with Laws and shall be made in good, workmanlike and lien-free manner.  If (a) Landlord shall fail to grant or withhold its consent to improvements requiring the consent of Landlord within 15 business days following Tenant’s written request for consent, (b) Tenant thereafter again requests in writing Landlord’s consent of the proposed improvements which request shall indicate that Landlord’s consent shall be deemed granted if Landlord fails to respond, and (c) Landlord fails to notify Tenant in writing of Landlord’s granting or withholding of consent to the proposed improvements within five (5) business days following Tenant’s second request, Landlord’s consent shall be deemed granted.  Landlord shall specify in reasonable detail the basis for the withholding of its consent to any proposed improvements.  With respect to any proposed improvements, Tenant may, concurrently with Tenant’s request for approval or Tenant’s notice to Landlord of Tenant’s intent to make such improvements, request that Landlord notify Tenant if such improvements are to be removed by Tenant at the expiration or earlier termination of this Lease.  Tenant’s notice to Landlord shall indicate that Landlord’s failure to notify Tenant within fifteen (15) business days following Tenant’s request as to whether such improvements are to be so removed shall be deemed Landlord’s agreement that such improvements need not be so removed, and if Landlord fails to so notify Tenant within said fifteen (15) business day period, Landlord shall be deemed to have agreed that such improvements need not be so removed.

 

(b)            Repairs; Maintenance .   Subject to Landlord’s obligations under Section 7(a) above, Tenant shall maintain the Premises in a clean, safe, and operable condition, and shall not permit or allow to remain any waste or damage to any portion of the Premises.  Additionally, Tenant, at its sole expense, shall repair, replace and maintain in good condition and in accordance with all Laws and the equipment manufacturer’s suggested service programs, all portions of the Premises, Tenant’s Off-Premises Equipment, the Generator Space and all areas, improvements and systems exclusively serving the Premises.  Tenant shall repair or replace, subject to Landlord’s direction and supervision, any damage to the Building caused by a Tenant Party.  If Tenant fails to make such repairs or replacements within 15 days after written notice from Landlord specifying such repair or replacement in reasonable detail, then Landlord may make the same at Tenant’s cost.  If any such damage occurs outside of the Premises, then Landlord may elect to repair such damage at Tenant’s expense, rather than having Tenant repair such damage.  The reasonable, actual cost of all maintenance, repair or replacement work performed by Landlord under this Section 8 shall be paid by Tenant to Landlord within 30 days after Landlord has invoiced Tenant therefor.  Except as otherwise expressly provided in this Lease, Tenant hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code or under any similar law, statute or ordinance now or hereafter in effect.

 

(c)            Performance of Work .   All work described in this Section 8 shall be performed only by Landlord or by contractors and subcontractors reasonably approved in writing by Landlord.  Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage naming Landlord, Landlord’s property management company and Landlord’s asset management company as additional insureds against such risks, in such amounts, and with such companies as Landlord may reasonably require.  Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable Laws with respect to such work.  All such work shall be performed in accordance with all Laws and in a good and workmanlike manner so as not to damage the Building (including the Building’s Structure and the Building’s Systems).  All such work which may affect the Building’s Structure or the Building’s Systems must be approved by the Building’s engineer of record, at Tenant’s expense and,

 

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at Landlord’s election, must be performed by a licensed contractor mutually acceptable to Landlord and Tenant.  All work affecting the roof of the Building must be performed by a licensed roofing contractor mutually acceptable to Landlord and Tenant and no such work will be permitted if it would void or reduce the warranty on the roof.

 

(d)            Mechanic’s Liens All work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant only, and Tenant shall not permit any mechanic’s liens to be filed against the Premises or the Project in connection therewith.  Upon completion of any such work, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work.  If such a lien is filed, then Tenant shall, within thirty days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period as may be necessary to prevent the forfeiture of the Premises, the Project or any interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either (1) pay the amount of the lien and cause the lien to be released of record, or (2) diligently contest such lien and deliver to Landlord a bond or other security reasonably satisfactory to Landlord.  If Tenant fails to timely take either such action, then Landlord may pay the lien claim, and any amounts so paid, including expenses and interest, shall be paid by Tenant to Landlord within ten days after Landlord has invoiced Tenant therefor.  Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,” “owner-agent” or other similar relationships).  Accordingly, all materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises, at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same.  Landlord may record, at its election, notices of non-responsibility pursuant to California Civil Code Section 3094 in connection with any work performed by Tenant.  Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the Premises, the Project or Landlord’s interest therein due to any work performed by or for Tenant or deemed to give any contractor or subcontractor or materialman any right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of such work.  Tenant shall defend, indemnify and hold harmless Landlord and its agents and representatives from and against all claims, demands, causes of action, suits, judgments, damages and expenses (including attorneys’ fees) in any way arising from or relating to the failure by any Tenant Party to pay for any work performed or materials furnished.  This indemnity provision shall survive termination or expiration of this Lease.

 

(e)            Janitorial Services .   Tenant, at its sole expense, shall provide its own janitorial services to the Premises and shall maintain the Premises in a clean and safe condition.  Tenant shall store all trash and garbage within the area and in receptacles designated from time to time by Landlord and shall, at its sole expense, arrange for the regular pickup of such trash and garbage at times, and pursuant to reasonable regulations, established by Landlord from time to time.  If Tenant fails to provide janitorial services to the Premises or trash removal services in compliance with the foregoing, Landlord, in addition to any other rights and remedies available to it, may provide such services, and Tenant shall pay to Landlord the cost thereof within thirty days after Landlord delivers to Tenant an invoice therefor.

 

(f)             Utilities .   Tenant shall provide and pay for all water, gas, electricity, heat, telephone, sewer, and other utilities and services used at the Project, together with all taxes, penalties, surcharges, and maintenance charges pertaining thereto.  Landlord shall not be liable for any interruption or failure of utility service to the Premises, and in no event shall the unavailability of such services or any other services (or any diminution in the quality thereof) render Landlord liable to Tenant or any entity claiming through Tenant for any damages caused thereby, constitute a constructive eviction of Tenant, constitute a breach of any implied warranty by Landlord, or entitle Tenant to any abatement of Tenant’s obligations hereunder.  Tenant shall not install any electrical equipment requiring voltage in excess of Building capacity.  The use of electricity in the Premises shall not exceed the capacity of existing feeders and risers to or wiring in the Premises.  Any risers or wiring required to meet Tenant’s electrical requirements shall, upon Tenant’s written request, be installed by Landlord, at Tenant’s cost, if, in Landlord’s reasonable judgment, the same shall not cause permanent damage to the Building, cause or create a dangerous or hazardous condition, or entail excessive or unreasonable alterations, repairs, or expenses.  Tenant shall not use machines or equipment in the Premises which overload any utility.

 

(g)            Security Services .   Tenant acknowledges that the Rent payable to Landlord hereunder does not include the cost of guard service or other security measures, and that Landlord shall have no obligation

 

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whatsoever to provide any such service or measures.  Tenant assumes all responsibility for the protection of Tenant, its agents and invitees.

 

9.              Use .  Tenant shall occupy and use the Premises only for the Permitted Use and shall comply with all Laws relating to the use, condition, access to, and occupancy of the Premises and will not commit waste, overload the Building’s Structure or the Building’s Systems or subject the Premises to use that would damage the Premises.  The Premises shall not be used for any use which is disreputable, creates extraordinary fire hazards, or results in an increased rate of insurance on the Building or its contents, or for the storage of any Hazardous Materials except in a manner and quantity necessary for the ordinary performance of Tenant’s business and then only in compliance with all Laws.  In no event shall the Generator Space be used for human occupancy other than entry for service or maintenance thereof.  If, because of a Tenant Party’s acts or because Tenant vacates the Premises, the rate of insurance on the Building or its contents increases, then Tenant shall pay to Landlord the amount of such increase on demand, and acceptance of such payment shall not waive any of Landlord’s other rights.  If Tenant vacates the Premises, Tenant shall, at its sole cost and expense, provide reasonable security for the Project and shall be responsible for any additional costs incurred by Landlord in connection with such vacation by Tenant.  Tenant shall conduct its business and control each other Tenant Party so as not to create any nuisance.  Except as the result of an emergency, a requirement by Law, or a specific provision set forth in this Lease, Tenant and Tenant Parties shall have access to the Building twenty-four (24) hours per day, seven (7) days per week during the Term.

 

10.           Assignment and Subletting .

 

(a)            Transfers .   Except as provided in Section 10(h), Tenant shall not, without the prior written consent of Landlord, (1) assign, transfer, or encumber this Lease or any estate or interest herein, whether directly or by operation of law, (2) permit any other entity to become Tenant hereunder by merger, consolidation, or other reorganization, (3) if Tenant is an entity other than a corporation whose stock is publicly traded, permit the transfer of an ownership interest in Tenant so as to result in a change in the current control of Tenant, (4) sublet any portion of the Premises, (5) grant any license, concession, or other right of occupancy of any portion of the Premises, or (6) permit the use of the Premises by any parties other than Tenant (any of the events listed in Section 10(a)(l) through 10(a)(6) being a Transfer ).

 

(b)            Consent Standards .   Landlord shall not unreasonably withhold, condition or delay its consent to any assignment or subletting of the Premises, provided that the proposed transferee (1) is creditworthy, (2) has a good reputation in the business community, (3) will use the Premises for general office use or the Permitted Use and will not use the Premises in any manner that would conflict with any exclusive use agreement or other similar agreement entered into by Landlord with any other tenant of the Complex, (4) will not use the Premises or Project in a manner that would materially increase the pedestrian or vehicular traffic to the Premises or Project, (5) is not a governmental entity, or subdivision or agency thereof, (6) is not another occupant of the Complex unless Landlord is unable to meet the space requirements of such occupant in the Complex, and (7) is not a person or entity with whom Landlord is then, or has been within the six-month period prior to the time Tenant seeks to enter into such assignment or subletting, negotiating to lease space in the Complex or any Affiliate of any such person or entity unless Landlord is unable to meet the space requirements of such person or entity in the Complex; otherwise, Landlord may withhold its consent in its sole discretion.  Additionally, Landlord may withhold its consent in its sole discretion to any proposed Transfer if any Event of Default by Tenant then exists.

 

(c)            Request for Consent .   If Tenant requests Landlord’s consent to a Transfer, then, at least 15 business days prior to the effective date of the proposed Transfer, Tenant shall provide Landlord with a written description of all terms and conditions of the proposed Transfer, copies of the proposed documentation, and the following information about the proposed transferee: name and address; reasonably satisfactory information about its business and business history; its proposed use of the Premises; banking, financial, and other credit information; and general references sufficient to enable Landlord to determine the proposed transferee’s creditworthiness and character.  Concurrently with Tenant’s notice of any request for consent to a Transfer, Tenant shall pay to Landlord a fee of $500 to defray Landlord’s expenses in reviewing such request, and Tenant shall also reimburse Landlord immediately upon request for its reasonable attorneys’ fees incurred in connection with considering any request for consent to a Transfer, provided however, if no extensive negotiation is required in connection with such proposed Transfer, the maximum amount that Tenant shall be required to reimburse Landlord shall not exceed $2,000.

 

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(d)           Conditions to Consent .   If Landlord consents to a proposed Transfer, then the proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes Tenant’s obligations hereunder; however, any transferee of less than all of the space in the Premises shall be liable only for obligations under this Lease that are properly allocable to the space subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its obligations under this Lease, but rather Tenant and its transferee shall be jointly and severally liable therefor.  Landlord’s consent to any Transfer shall not waive Landlord’s rights as to any subsequent Transfers.  If an Event of Default occurs while the Premises or any part thereof are subject to a Transfer, then Landlord, in addition to its other remedies, may collect directly from such transferee all rents becoming due to Tenant and apply such rents against Rent.  Tenant authorizes its transferees to make payments of rent directly to Landlord upon receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder.  Tenant shall be responsible for the cost of any demising walls or other improvements necessitated by a proposed subletting or assignment.

 

(e)            Attornment by Subtenants .   Each sublease by Tenant hereunder shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the event of termination, re-entry or dispossession by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be (1) liable for any previous act or omission of Tenant under such sublease, (2) subject to any counterclaim, offset or defense that such subtenant might have against Tenant, (3) bound by any previous modification of such sublease not approved by Lan


 
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